Banking has been a notorious pitfall for marijuana business owners. Even in Colorado, the first state to sell recreational marijuana legally, banks still refuse to work with dispensaries, growers and any other industry ventures for fear of federal scrutiny. The majority of Colorado's marijuana economy is all cash-based, which comes with a variety of safety concerns for customers and gray areas for business owners and tax officials.
As a result, Littleton-based CanPay is becoming a popular solution. The CanPay system is currently in six locations across Colorado and has expanded to five other states, working with over thirty dispensaries. As the first approved debit-payment option for the cannabis industry, it is the only non-cash approved payment system in some states with new medical markets, such as Florida.
“No card brands are participating in the cannabis industry,” says Dustin Eide, CEO of CanPay. “As a customer or patient of cannabis, CanPay allows it to finally feel like everywhere else you shop. There is complete transparency between the customer and the dispensary.”
For elderly or immobile patients, running to the ATM each time they need to restock their medication is not a viable option. Having a safe and easy way for patients to buy cannabis products is important if the industry is to continue developing. Unlike Colorado, some states allow the delivery of MMJ, but delivery personnel may not always be equipped with exact change, and concerns mount when they must carry large sums of cash. The risk drives up the cost of operation for business owners, which leads to higher prices for consumers.
Enter the CanPay app. “When a customer accesses the app, a unique token is generated with a payment pin. This can be used only once and expires in thirty minutes. This holds no personal information and creates a more secure system than traditional online credit-card transactions,” Eide says.
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The CanPay app is free for customers, and all processing fees are handled by local dispensaries. For those owners who may be skeptical about the efficacy of a digital-payment service, the value of that convenience may come as a surprise: Data has shown that customers are buying more in bulk. “We’ve found that customers generally spend 15 percent more when paying with a digital method,” Eide says.
As of January 2017, no Colorado bank or credit union has openly acknowledged cannabis accounts. Bankers in California are considering starting a public-banking option that, if successful, could be the template for a similar effort in Colorado. In younger markets like Florida, several newly purposed bills are trying to strip away the uncertainty of marijuana banking but still rely heavily on digital solutions in the interim.
“These businesspeople aren’t criminals, but in some instances, they are still treated as such," Sundie Seefried, president of Florida’s Safe Harbor Private Banking, told Forbes. “We’ve partnered with CanPay because we see similar values between our approaches to helping cannabis retailers.”